Tag: Microsoft

OM in the News: The AI Splurge and Big Tech’s Workforce

Tech companies are rushing to trade their people for more chips. “Some of those companies might come to regret the exchange,” writes The Wall Street Journal (April 27, 2026).

Microsoft (by 7%), Block (parent of Square and Cash App by 40%) and Meta (by 8,000) are just the latest major tech companies trying to scale back their workforces in the name of AI. Layoffs affecting 45,800 tech employees were just announced, making March 2026 the worst month for reported tech-job reductions in at least 2 years.

Companies are straining to portray the cuts as evidence that they are confident in an AI future in which more workers will be replaced by machines.  Tech companies are shelling out as much as they can—more than their rivals, they hope—on AI chips and data centers that could put them in the lead in a race they feel they can’t afford to lose. That in turn is heightening competition over who can use AI to help do more with a lot less, freeing up money to spend on expensive chips.

Dressing up layoffs as visionary moves for the age of AI carries certain risks. Rampant layoffs hurt morale and create an exit incentive for other employees, especially talented ones with alternatives. For all of AI’s capabilities, people will be needed to figure out business models, deal with customers and, importantly, make sure AI tools are being deployed and used safely.

The layoffs also lend credence to a growing public perception that AI isn’t a panacea but a job killer. That will feed a backlash that is already constraining AI, as more communities are fighting against the construction of massive data centers.

The reduction in workforces sends two messages. First, it indicates tech companies will stop at nothing to spend on AI, something markets have often cheered. Second, it says tech companies believe they can operate fine with fewer employees, even after a couple of years of cuts that followed a Covid-era hiring spree.

Classroom discussion questions:

  1. What are the tradeoffs in reducing tech headcounts?
  2. What are the implications for our students and recent grads?

 

 

OM in the News: AI Push Is Costing a Lot More Than the Moon Landing

It’s bigger than the railroad expansion of the 1850s, the Apollo space program that put astronauts on the moon in the 1960s and the decadeslong build-out of the U.S. interstate highway system that ended in the 1970s.

We’re talking about the data centers now being built and financed by some of the world’s biggest companies in the artificial-intelligence boom. Four U.S. tech giants—Microsoft, Meta, Amazon, and  Google—are planning to spend $670 billion to build out AI infrastructure this year alone as they scramble to increase the computing power needed to operate and scale their AI-related endeavors.

And if you compare this spending to some of the biggest capital efforts in U.S. history by percentage of gross domestic product, you can see exactly how staggering the figures are, reports The Wall Street Journal (Feb. 9, 2026). In fact, it’s dwarfed only by the Louisiana Purchase, completed in 1803, which doubled the size of the U.S. and consumed 3% of the GDP.  (The AI buildout is projected at 2.1% of GDP, while railroads in the 1850s were 2%, the US highway system was 0.4%, and the Apollo space program was 0.2%).

The four companies’ capital spending has been increasing as a percentage of their annual revenue the past few years. In 2026, Meta’s spending could amount to more than 50% of its sales for the first time ever.

How is this build-out an OM issue? First, as we discuss in Chapter 2, these four companies are betting that they will attain competitive advantage by competing on low-cost and response. Second, our chapter on sustainability (Supp. 5) points out the costs of carbon footprints, which data centers generate heavily. Third, as we note in the chapter on location strategies (Ch. 8), the centers locate where power is cheap and plentiful.

As of late 2025, Northern Virginia has 64 data centers under construction, solidifying its position as the world’s largest data center market. The region hosts over 550 existing facilities.  They consume massive amounts of power, comparable to the total usage of large states like Minnesota.

Classroom discussion issues:

  1. Discuss the plusses and minuses of this massive construction trend.
  2. What do the builders hope to obtain?

Teaching Tip: Why NFL Players Are Studying Project Management

On the topic of project management (Chapter 3), you might find this story of how former NFL football players are tackling that subject interesting.

Will Rackley has gone from competing in the NFL to analyzing business operations at Atrium.

It turns out real NFL retirees who enter the project management business are learning to make an impact in different ways. “You can’t just start knocking people out of their cubicles,” says Will Rackley, a former pro offensive lineman who is five weeks into a job as a business operations analyst at the staffing firm Atrium. “It can be a culture shock when stepping into a corporate setting, as opposed to how things are done in a locker room.”

Rackley hasn’t gone soft—and toughness is a big reason why he and other ex-NFL players are coveted job candidates, reports The Wall Street Journal (Feb. 10, 2025). Managers often struggle to recruit people who can take, and deliver, candid feedback. A gridiron pro accustomed to coaches who yell, cuss and call out mistakes in postgame film sessions isn’t likely to wilt under a little constructive criticism.

The former NFL players looking for regular jobs generally aren’t Hall of Famers with set-for-life money. Often they are men who were pushed out of the game by injuries or younger, cheaper draft picks. They have dealt with disappointment and regrouped.

Rackley was a third-round selection back in the 2011 NFL draft. This year, he was a No. 1 pick when Atrium Corp. scouted for someone to analyze internal operations and suggest improvements. It turns out Rackley had excelled in the project-management program that Atrium and Microsoft run in partnership with the NFL. But he had to compete for the job with about 150 people, mostly nonathletes with traditional résumés.

The project-management program that trained Rackley recently opened applications for its second cohort of 20 NFL veterans who will study full time for 8 weeks with Microsoft instructors. It is designed to build technical skills and fill in blanks on the résumés of former players who missed internship and entry-level job opportunities while training year-round to reach the pros.

“This curriculum gives them mock projects and a credential they can take to an employer and say, ‘I may not have as much job experience, but I have technical training in addition to my playing career.’”  says Atrium’s VP.

Teaching Tip: How Microsoft Sells Supply Chain Management and ERP

ms scm graphicHere is proof that SCM has turned into a field that every student needs to understand. The following is from Microsoft’s web site called the Dynamics of SCM, which promotes its product, called Microsoft Dynamics ERP :

Supply chain management is the oversight of the entire lifecycle of a product or service: from its infancy as a raw material or idea, to the manufacturing of the product, to its distribution, to the retailer, and then ultimately, to the consumer. Each of these stages of the product or service is a link in a chain. Each step is fastened to the next, interconnecting to facilitate the creation of a product.

Maintaining a holistic view of your supply chain activities is essential for efficiency. You need to be able to examine your business—every inch of it—in real time. To have supply chain control, you need to know what’s going on at every stage, at all times.

An enterprise resource planning (ERP) solution will provide you the control of your supply chain you need for more efficient people and processes, better costs, happier customers and greater profits.  This automation helps reduce redundant tasks and can increase accuracy, all the way to your customer’s receiving dock. That can eliminate bottlenecks, improve order processes, and minimize both handling time and overhead.

ERP gives you the ability to find exactly the information you’re looking for so you can make smarter decisions more quickly.

  • Simplify critical purchasing and receiving processes.
  • Know what your customers want.
  • Keep inventory lean and still address demand.
  • Tools to make smarter buying decisions and to negotiate better terms.
  • Help improve customer service and improve customer relationships.